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Agriculture News

Does Revenue Diversification Improve Small and Medium-Sized Dairy Farm Profitability?

Choices Magazine | Posted on December 20, 2018

Dairy farmers are well acquainted with managing volatile input and output prices. In the past 5 years, dairy farms experienced record high milk prices in 2014 followed by devastatingly low milk prices. In Minnesota, farms that contribute financial information to the FINBIN farm financial database reported the lowest average accrual net farm income, $407, in 2009, while the same sample reported an all-time average high of $236,544 just 5 years later in 2014. Even though cow-level milk production has increased since 2007; consolidation and a rapid increase in the average number of cows per farm are commonplace in the industry, as evidenced by the total number of U.S. licensed dairy farms, which decreased from 59,135 in 2007 to 40,219 in 2017 

Dairy Sector Consolidation, Scale, Automation and Factor Biased Technical Change: Working through “Get Big or Get Out”

Choices Magazine | Posted on December 20, 2018

Two trends: One is diverging trajectories for different dairy herd scale categories in the three Great Lakes states. Data in Table 2 presage the eventual exit of most operations with smaller herd sizes, stasis among most operations in the middle, and future expansion concentrated among larger operations. Those middle-tier farms may not be safe, however. While we cannot find evidence that Earl Butz, the controversial former Secretary of Agriculture under Richard Nixon and Gerald Ford, ever asserted, “Get big or get out”—a phrase indelibly linked to him—he held firmly to the belief that farms that were not growing would eventually exit. Possible constraints on expansion for dairy farms of all sizes vary by location and can take many forms, including limited access to feed and forage, constricted local processing capacity, and manure disposal challenges. All else equal, however, as unit costs decline with scale, medium-sized operations may be unable to generate cash flow or access the loans needed to expand and lower cost structures. The other trend is bias toward capital, rather than labor, in intended investments. To understand this tilt, some reflection on the investment environment is in order. One point, made previously by Sumner (2014) but still true as of writing, is that real capital costs are at historic lows, whereas all-inclusive labor costs have stagnated. Furthermore, production agriculture has become an increasingly technical field, requiring protracted human capital investments in skill development. Forming enduring employment connections with hired help interested in and well-positioned to acquire the requisite skills has been a continual source of woe for many operators.

America’s Dairy Industry Facing Difficulties from Long-Running Structural Changes

Choices | Posted on December 20, 2018

Where then will the future take the dairy sector structure? The crux of structural change is that a sector’s prospects are not strongly tied to those of its participants. Hard science is likely remain in the driver’s seat, with economic considerations defining the terrain and policy interventions seeking to level the bumps. Change will continue and it may continue to be wrenching, favoring consumers on the whole and some producers. This Choices theme deals with all of the above, although with emphasis on producers. But other forces, new and old, are coalescing. Butter substitutes consumed much political oxygen in the United States for decades, and milk substitutes are doing so now. The presence of substitutes will largely impact markets and production structure through overall pricing pressure. A second set of forces—having to do with such process attributes as animal welfare, organic traits, and One Health connections—may emerge to have more direct and more varied impacts on dairy markets and production structure

Virginia losing one dairy farm a week

Edairy News | Posted on December 20, 2018

Brubaker is far from the only dairy farmer in Virginia who struggled to make the business work amid falling milk prices, oversupply and growing trade pressure. In the first half of this year, dairy farms in the state closed at a rate of more than one a week.The industry has been struggling for years, but the past two years have been particularly bad, with the total number of licensed farms dropping 15 percent since 2016, leaving 552 as of June.

U.S. food supply has low pesticide residues

Feedstuffs | Posted on December 20, 2018

The U.S. Department of Agriculture published the 2017 "Pesticide Data Program (PDP) Annual Summary." The summary shows more than 99% of the samples tested had pesticide residues well below benchmark levels established by the Environmental Protection Agency.

Conservation Practices to Reduce Nutrient Loss: How Do They “Stack” Up?

Farm Doc Daily | Posted on December 20, 2018

Conservation practices recommended to reduce nutrient loss from fields are generally classified as in-field practices, edge-of-field practices, and land use change practices. Each practice has a different effectiveness for reducing nutrient loss as well as different associated costs and cost efficiencies. Beyond these important differences, there are several additional details about each practice — level of change required, stackability, and trackability — that are important to consider when weighing options to improve water quality. The adoption or implementation of any conservation practice will necessarily require a change from a given status quo. Some recommended practices, such as converting corn or soybean acres to perennial energy crops or pasture, will be relatively major shifts from conventional agricultural management. Other practices, like shifting nitrogen fertilizer applications from the fall to the spring, will be relatively smaller changes.Another consideration is that some practices can be layered with other practices so that the practices are essentially “stacked” together. The “stack-ability” of a practice refers to the fact that some practices pair naturally together, while others may actually be mutually exclusive. For example, in-field and edge-of-field practices are often highly compatible, but a denitrifying woodchip bioreactor and a constructed wetland would generally not treat the same drainage outflow, at least at the field scale (that is, they might be mutually exclusive).“Track-ability” is a third important concept. It will take time for water quality improvement occurring at the field and farm scale to accumulate to significant levels at the watershed scale and then eventually migrate to the Gulf of Mexico to ultimately reduce the size of the annual hypoxic zone. This, after all, is the goal of reducing nutrient loss from fields in the Mississippi River basin. Tracking the adoption of recommended practices is important for states and federal agencies to quantify progress toward Gulf of Mexico hypoxia goals given the lag time to physically observe improved water quality at such a large scale. However, the implementation of some types of conservation practices is harder to track than others. For example, conservation practices that are adopted without federal incentive payments present a significant challenge for tracking and reporting purposes.

Calif. Dairy Farmers Get 36¢ Bump From New Federal Order

Milk Business | Posted on December 20, 2018

California dairy farmers got their first glimpse of what the new Federal Milk Marketing Order will do for them this week. In Tulare in California’s Central Valley, it amounts to 36¢/cwt.“A switch to the Federal Milk Marketing Order means producers are seeing 36¢ (in Tulare) to 86¢ (in Los Angeles) more for their November milk,” says Geoff Vanden Heuvel, director of regulatory and economic affairs for the California Milk Producers Council.The announced Statistical Uniform Price for Tulare was $14.94/cwt and for Los Angeles, $15.44. The Producer Price Differential for California in November was $1.

USMCA IP provisions make for uneven playing field for Canadian, U.S. farmers

Canada West Foundation | Posted on December 20, 2018

Farmers in North America generally did well in the new United States-Mexico-Canada Agreement (USMCA). But there is one nasty surprise buried in the agreement that should unite all Canadian farmers—intellectual property rules that prevent circumvention of digital locks on electronics including sophisticated farm equipment like tractors and combines that will apply to Canadian, but not to American, farmers. Currently, in the middle of critical harvest time, a farmer in Emerson, Man., can look across the border to Pembina, N.D., and see a farmer there hack her tractor to fix a problem without consequence. But should the Manitoba farmer try this she would face serious sanction. Or more starkly, the Manitoba farmer could drive their tractor across the border to hack the software without problem or sanction, but should she drive the tractor back into Canada she would be driving into trouble.The problem succinctly is that the modern tractor or combine contains more lines of code than was on any American lunar mission. In the past, when a tractor would break down a farmer would grab a wrench or call any local mechanic. But now when software stops a tractor—God forbid in the middle of harvest with a year’s income on the line—the farmer must wait for an authorized manufacturer’s service technician to drive out, “unlock” the software, diagnose and hopefully fix the problem; a problem that the farmer or local mechanic could have fixed if they could unlock the software. But digital locks now embedded within the tractor’s software mean that accessing this software is against the law for anyone other than a manufacturer-authorized repair person—anyone including the farmer who owns the equipment.

Pet food data: US spending up, pet owners turn to vets

Pet Food Industry | Posted on December 20, 2018

U.S. baby boomers increased their spending on pet food nearly 32 percent in 2017, after their spending fell the year before; and perhaps even more positive for the future of the pet food market, Generation X pet owners’ spending climbed 12.4 percent last year, and millennials’ rose 5.2 percent. In addition to these numbers, a disparate set of data on veterinarian-pet owner conversations about pet food and nutrition provide a snapshot of the market’s status and future heading into 2019.

Stand firm against activist demands

Meating Place (free registration required) | Posted on December 20, 2018

In mid-November, a protest was held outside of a hog farm in Utah as part of the Animal Liberation Western Convergence. Again, the group called for “just one pig” to be released to them. In rural Iowa last week, a car started following a truckload of pigs being moved from one farm to another. When the truck stopped, the car’s driver got out and began to beg for one of the pigs to be released to her. Over the weekend, a large group of protesters went to a dairy farm in California where they attempted to steal a calf earlier this year. They brought a blanket and a bottle and shared their intention to get the farm to give them a calf.All of these incidents have a few things in common – the involvement of activist group Direct Action Everywhere and the call for animals to be released. DXE has started consistently demanding for animals to be released to them from farms, emboldened by an officer who let them take one chicken in an October protest and a farm who gave 100 animals to the group in November.While it may be tempting to try to get the group to leave by allowing them to take an animal, I can’t emphasize enough how important it is that we do not give in to their demands. Giving this group an animal significantly weakens our attempts to convey why their actions are unacceptable. DXE members have appeared on camera saying “how can they press charges against us for taking animals when they gave us one?” Allowing them to take animals gives the impression that what they are doing is justified – at least in their eyes.